When is the UK construction PMI and how could it affect GBP/USD?

The UK construction PMI overview

The UK construction PMI for July is due for release today at 0830GMT, with the figure expected to come in at 52.8, down from June’s 53.1 reading.

Deviation impact on GBP/USD

Readers can find FX Street's proprietary deviation impact map of the event below. As observed the reaction is likely to remain confined between 10 and 45 pips in deviations up to 2 to -2, although in some cases, if notable enough, a deviation can fuel movements of up to 70 pips.

How could affect GBP/USD?

Technically, the pair looks to extend the drop below the 1.31 handle in a bid to test the 1.3050-30 demand area zone. Below which floors open towards the 1.3000 psychological level. On the upside, a convincing break above 1.3122/23 (daily pivot/ 10-DMA), GBP/USD could retest 1.3144 (Aug 1 high) en route 1.3217 (50-DMA).

A disappointing UK construction PMI report cannot be ruled today, given Wednesday’s downbeat manufacturing PMI reading. The construction PMI has widely shown the similar behavior as the manufacturing and services PMIs, analysts Societe Generale pointed out in a research note.

However, markets see a little reaction on the data release, as the main event risk for the pound remains the Bank of England (BOE) rate hike decision.

Key Notes

GBP/USD Review: freezing as UK rate hike comes in for a landing

Further rangebound seen in GBP/USD – UOB

Market themes of the Day: The Bank of England is set to deliver 25 bp rate hike

About the UK construction PMI

The PMI Construction released by the Chartered Institute of Purchasing & Supply and Markit Economics shows business conditions in the UK construction sector. It is worth noting that the construction sector does not influence, either positively or negatively, the GDP as much as the Manufacturing sector does A result that values above 50 signals appreciates (or is bullish for) the GBP, whereas a result that values below 50 is seen as negative (or bearish).